Good morning, CIOs. People tend to think of robots as humanoid machines, climbing stairs, assembling cars, or fetching goods from the back of a warehouse. Robots do all of those things. Sometimes, however, they are simply pieces of software, augmenting or replacing human labor. These software robots might not be as flashy, yet they will have an enormous impact on the way people live and work. CIO’s Journal’s Sara Castellanos has the story.

Hundreds of software robots work alongside human employees at companies such as Ernst & Young and Walmart Inc. where they’re saving employees millions of hours of time. “We’re saving (employees) from repetitive tasks that they tend to enjoy less, and freeing them up to do more meaningful, thought-intensive more focused human work,” Jeff Wong, global chief innovation officer for Ernst & Young, says.

Software robots are part of an industry called robotic process automation, which is evolving to include advanced software bots built with machine learning algorithms in order to perform tasks such as object recognition. The market for software robots, including those that incorporate artificial intelligence, is expected to grow to $2.9 billion by 2021, up from $250 million in 2016, according to Forrester Research Inc. Read the full coverage here and below.

Robotic process automation efforts suffer from poor planning. Software robots don’t need to take breaks, they don’t make mistakes, and they can do the boring work for human employees. But there are growing pains associated with deploying robotic process automation, analysts say. A study by The Hackett Group finds that companies are failing to optimize processes or address data quality issues before introducing RPA to the workforce, and they’re underestimating the amount of time and resources required to deploy the robots.

Jeff Wong, global chief innovation officer for Ernst & Young

EY

DOWNLOAD EXTRA: A Bot User Group to Rule Them All

EY learned a few things about the challenges of implementing RPA when deploying bots in its human resources onboarding process. One early hurdle involved figuring out which systems bots should be able to access, and who would oversee permissions.

The team quickly learned that “we don’t have a policy on who can put a bot into our system, and what kind of access rights we can give it,” said Weston Jones, leader for EY’s global robotics and intelligent automation practice. EY brought together IT, HR, policy and internal controls staff to create new rules.

The project then faced another challenge. When creating a bot’s user ID, internal systems would trigger processes usually reserved for human employees, such as assigning a badge, computer or office. In response, EY created a “bot user group” with its own set of rights and processes.

The use of RPA spawned a broader set of organizational changes. The company now has a group called Automation Central that oversees all internal automation efforts. — Steven Norton

SECURITY AND PRIVACY

LEAH MILLIS/REUTERS

Congress poised to pass new privacy rules. U.S. lawmakers are set to vote Friday to amend privacy laws that govern whether companies must hand over data stored overseas, Reuters reports. The proposal, called the Cloud Act, would speed up the process by which companies and courts determine whether to supply data in response to requests from law enforcement. The proposal has bipartisan support and is attached to a federal spending bill. If passed, a case before the U.S. Supreme Court that involves Microsoft Corp.’s refusal to reveal a criminal suspect’s email that the company has stored in Ireland.

Guccifer 2.0 was Russian agent. Guccifer 2.0, a hacker source that provided WikiLeaks in 2016 with stolen email from the Democratic National Committee, was an officer with Russia’s military intelligence directorate. The Daily Beast reports that security experts were able to trace Guccifer’s online activity to a Moscow-based Internet Protocol address after he failed to activate a VPN client.

EUROPE

A Google Popup Digital Workplace in Amsterdam.

BART MAAT/EPA/SHUTTERSTOCK

Google asks for consent from publishers for gathering user data. Alphabet Inc.’s Google will ask web publishers to obtain consent on its behalf to gather personal information on European users and target ads at them using Google’s systems, the WSJ’s Lara O’Reilly reports. Under General Data Protection Regulation, global companies will be required in many cases to get user consent to gather personal information, and generally the consent will have to be more explicit.

MORE TECHNOLOGY NEWS

SEC examiners will inspect whether fund managers have bought the type of assets they advertised to investors in disclosure documents, among other things.

JONATHAN ERNST/REUTERS

Crypto-focused hedge funds on SEC’s radar. The Securities and Exchange Commission is preparing to examine as many as 100 hedge funds focused on cryptocurrencies, the WSJ’s Dave Michaels reports. The initiative is separate from the dozens of enforcement investigations already under way, which largely target initial coin offerings

JP Morgan Chase considers blockchain spinoff. The bank developed its own customized blockchain called Quorum two years ago as part of an effort to explore the technology’s use in cross-border payments and other actions. The FT reports that some rivals may be reluctant to use Quorum because of its association with the bank.

Next worry for Facebook: Disenchanted users. Brian Weiser, an analyst with New York-based Pivotal Research, tells the WSJ’s Kirsten Grind that he expects the Cambridge Analytica issue to reduce the amount of time users spend on Facebook Inc. by 10% to 15%. “The biggest, most concerning thing here is the scale of this problem,” Mr. Weiser says. “All the operational failures indicate a real management problem.” Warning signs began appearing last year. In an earlier Pivotal Research Group analysis of Nielsen data, Facebook’s U.S. users spent 7% less time on the site in August compared with a year ago and 4.7% less time in September.

The task ahead. Facebook Mark Zuckerberg Thursday said that the company’s investigation into outsiders’ handling of its users’ information won’t be able to uncover where all the data ended up and how it is being deployed. Facebook will examine tens of thousands of apps that collected large amounts of user data, an effort that may cost “many millions of dollars,” Mr. Zuckerberg tells the WSJ’s Deepa Seetharaman in an interview.

How the Uber self-driving car could have missed seeing the pedestrian. An analysis of last week’s fatal accident involving an Uber car and a pedestrian points to possible shortcomings of the vision technology that dozens of auto makers and tech giants have hailed as a fundamental part of bringing driverless cars to the road. The Journal’s Tim Higgins seeks out self-driving experts for answers.

Shrubbery. Some experts say Uber’s system may not have discerned the difference between shrub branches alongside the Tempe, Ariz. roadway and the pedestrian.

A blind spot? Raj Rajkumar, a Carnegie Mellon University professor, suggested the laser sensor may have had a blind spot around the vehicle because of its position mounted on the roof.

A failure of technology. “There’s no question the Uber vehicle should have automatically braked before it hit her,” said Todd Humphreys, an associate professor who specializes in robotic perception at the University of Texas at Austin. He said sensors on the vehicle should have had a clear view of the pedestrian.

Microsoft’s Allen finds World War II ship. A research vessel funded by Microsoft Corp. co-founder Paul Allen has located the U.S.S. Juneau, a cruiser sunk in the South Pacific by Japanese torpedoes in the Battle of Guadalcanal. Hundreds of sailors, including five brothers from Waterloo, Iowa–’the Fighting Sullivans’–died when the ship exploded and sank, the New York Times reports.

WHAT YOUR CEO IS READING

YUI MOK/ZUMA PRESS

Every week, CIO Journal offers a glimpse into the mind of the CEO, whose view of technology is shaped by stories in management journals, general interest magazines and, of course, in-flight publications.

Killer app for the social media age #1: Data ownership. Speaking at a cybersecurity event in 2010, cyber expert Bruce Schneier had some words on social media. “Don’t make the mistake of thinking you’re Facebook’s customer, you’re not – you’re the product,” he said. “Its customers are the advertisers.” This week’s Facebook controversy provides a good opportunity to rethink data ownership. “Unless consumers have an incentive to keep a close eye on their data, they will remain passive — clicking consent boxes while companies profit from them and politicians manipulate them,” the FT writes. “Individuals’ ownership of their data will only become effective when they have the means and the incentive to exercise the rights of ownership.”

Killer app for the social media age #2: Cigarettes. To consider: “While Facebook is a fundamentally misanthropic venture that pretends to be a community, smoking is a community activity for people who pretend to be misanthropes,” The FT’s Alexandra Scaggs writes.

GDPR comes with questions, price tag. As companies scramble to get their data practices in line with Europe’s General Data Protection Regulation, which takes effect May 25, serious questions remain, says Businessweek. For instance what constitutes “legitimate interest,” a GDPR process by which companies are allowed to use personal data? Does it extend to “data needed for targeted online ads? Signals broadcast by Wi-Fi routers? Medical results collected to improve health care?” One GDPR item not in doubt: The cost to companies. According to Ernst & Young, the biggest 500 companies will spent $7.8 billion to meet compliance.

Humanity is about to get pwned. Given advances in artificial intelligence, weaponry and the spread of fake news, how long before civilization goes kaput? According to the Gott’s Principle, a variation of the Copernican Principle that has been used to accurately predict the lifespan of numerous Broadway shows, humanity has about 730 years, author William Poundstone tells Vanity Fair’s Nick Bilton. Yuval Noah Harari, author of “Homo Deus” and a participant of a CIO Journal Q&A last year, sees the beginning of the end coming much, much sooner. In decades, biotech and IT will understand people better than they know themselves, he said at a recent New York Times event. “Once you have an external outlier that understands you better than you understand yourself, liberal democracy as we have known it for the last century or so is doomed.”

The Senate passed a $1.3 trillion spending bill, acting to avert a government shutdown with less than 24 hours to spare and bringing to a close a messy negotiating process over the sprawling measure. (WSJ)

The Morning Download is edited by Tom Loftus and cues up the most important news in business technology every weekday morning. You can get The Morning Download emailed to you each weekday morning by clicking http://wsj.com/TheMorningDownload.